Goh Lay Khim v Isabel Redrup Agency Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Chao Hick Tin JA,Andrew Phang Boon Leong JA,Judith Prakash JA,Tay Yong Kwang JA
• Judgment Date: 10 February 2017
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 54 and 55 of 2016
• Date: 10 February 2017

Goh Lay Khim and others

and

Isabel Redrup Agency Pte Ltd and another appeal

[2017] SGCA 11

Sundaresh Menon CJ, Chao Hick Tin JA, Andrew Phang Boon Leong JA, Judith Prakash JA and Tay Yong Kwang JA

Civil Appeals Nos 54 and 55 of 2016

Court of Appeal

Agency — Rights of agent — Remuneration — Commission — Owners of properties conducting negotiations with purchaser through estate agent — Owners and purchaser reaching final sale agreement through direct negotiations without estate agent's involvement — Whether term of effective cause could be implied — Whether agent was effective cause of sale

Tort — Defamation — Absolute privilege — Defendant making police report and filing complaint to regulatory agency — Whether absolute privilege applied

Tort — Defamation — Justification — Defendant making police report and filing complaint to regulatory agency — Defendant forwarding report and complaint to member of press — Whether defamatory meaning of report and complaint was that plaintiff had committed alleged act, that there were reasonable grounds to believe that she had committed alleged act, or that there were grounds to investigate whether she had committed alleged act — Whether defence of justification made out

Tort — Defamation — Qualified privilege — Defendant making police report and filing complaint to regulatory agency — Defendant forwarding report and complaint to member of press — Whether communication to member of press could be protected by qualified privilege — Whether defence defeated by malice

The owners of nine adjacent residential properties (respectively, “the Owners” and “the Properties”) decided to put up the Properties for collective sale. They appointed Mr Simon Loh (“Loh”), the brother of one of the Owners, as their representative. Loh attempted to arrange a sale to Aurum Land Pte Ltd (“Aurum”), a residential property developer. However, Aurum subsequently lost interest in the deal.

The Owners then engaged Isabel Redrup Agency Pte Ltd (“the Agency”) as their marketing agent. The managing director of the Agency, Ms Susan Prior (“Ms Prior”), advertised the sale of the Properties and this was noticed by Ms Michelle Yong (“Ms Yong”), a director of Aurum. This rekindled Aurum's interest in the Properties. A letter of offer was entered into between the Owners and Aurum as well as an agreement stipulating a 2% commission payable to the plaintiff upon successful completion of the sale.

Intense negotiations toward finalising the sale were conducted by Ms Prior (on Loh's and the Owners' behalf) and Ms Yong. A number of draft options were exchanged in the process. One such draft option (“the Prior Option”) was sent to Loh by Ms Prior by e-mail on 3 September 2010 (“the 3 September 2010 E-mail”). The Prior Option was based on a draft option which Ms Yong had sent to Ms Prior, but included an added clause providing for commission to be paid to the Agency. In the event, no option was signed; negotiations broke down due to the Owners' insistence on a term that 1% of the sale price would be released to the Owners upon grant of the option to purchase (“the 1% Option Release”). Ms Prior then informed Loh that Aurum was walking away from the deal because Aurum's board found the 1% Option Release unacceptable.

Loh continued direct negotiations with Ms Yong without Ms Prior's knowledge, while claiming to Ms Prior that the Owners had taken the Properties off the market. After further negotiation, the Owners granted Aurum an option to purchase the Properties. The material terms of this option were the same as an earlier draft which Ms Prior had exchanged with Ms Yong, except that it did not include the 1% Option Release. Aurum subsequently exercised the option.

Ms Prior discovered the sale shortly after the option was granted and informed Loh of the Agency's intention to claim its commission. Loh denied that any commission was claimable. When Ms Prior persisted in seeking a commission from Loh and the Owners, Loh sent a series of text messages to Ms Prior threatening, among other things, to make complaints to the authorities. With the Owners' approval, Loh proceeded to lodge a police report as well as a complaint with the Council of Estate Agencies (collectively, “the Complaints”) alleging that Ms Prior may have committed forgery in respect of the Prior Option. Loh also forwarded the Complaints to a journalist with the Straits Times.

In Suit No 755 of 2011, the Agency claimed, among other things, that it was entitled to 2% of the sale price plus GST as commission as it was the effective cause of the sale of the Properties. The appellants argued that the Agency was not entitled to any commission as it had failed to cause a sale to be concluded between the parties and had (through Ms Prior) breached its duties as the marketing agent of the Properties. The breaches alleged included misrepresentation in the 3 September 2010 E-mail and the continued efforts of Ms Prior to market the Properties after having been instructed to stop. Suit No 381 of 2011 involved claims by both the Agency and Ms Prior personally, including claims for defamation arising out of the making of the Complaints and the act of forwarding them to the journalist. The defendants sought to rely on the defences of justification, absolute privilege and qualified privilege.

The High Court found that the Agency was entitled to its commission, that Loh was liable to Ms Prior in defamation for the making of the Complaints and the forwarding of them to the journalist, and that the Owners were liable to Ms Prior for the forwarding of the Complaints to the journalist. The Owners and Loh appealed against both decisions.

Held, dismissing the appeals:

(1) In the absence of an express contractual term governing an agent's right to commission, the court would imply an “effective cause” term, ie, a term that commission would be payable if the agent's services were the effective cause of the transaction. That the commission was stated to be paid out of the sale proceeds of a property and payable upon completion of the sale would not, without more, prevent the implication of an effective cause term. There would need to be clear and express language to the effect that the agent's right to commission would only crystallise if it saw the transaction to the end. There was no express provision in this case, and an effective cause term was therefore implied: at [28], [33] and [36].

(2) Certain factors could be looked to as a guide to whether the “effective cause” requirement was satisfied, but ultimately the inquiry was whether, on a holistic assessment of all the relevant facts, the agent was the critical cause of the sale. Here, Ms Prior had rekindled Aurum's interest in purchasing the Properties, had laid the groundwork for the sale, had been instrumental in bringing the Owners and Aurum into agreement on the material terms, and the sale was concluded on substantially those same terms. She was therefore the effective cause of the sale: at [37] to [42].

(3) It was unnecessary to decide whether, under Singapore law, dishonesty or bad faith on the part of an estate agent could deprive the agent of a commission that he had already earned prior to the breach and the termination of the agency. On the facts, it was clear that Ms Prior had not acted dishonestly or in bad faith. The 3 September 2010 E-mail did not misrepresent the Prior Option. Further, Ms Prior had been open about her continued efforts to secure a buyer for the Properties and Loh had arguably waived the breach, if any. In any event, there was no evidence that Loh as the Owners' representative had at any point elected to terminate the agency relationship: at [48] to [55].

(4) With regard to the defamation claim, although statements made in the course of judicial or quasi-judicial proceedings were protected by absolute privilege, gratuitous complaints made to prosecuting authorities were protected by qualified privilege only. This position would adequately serve the public interest by promoting responsible reporting, as an informant would be able to freely make reports but would not be able to get away with malicious reporting: at [66], [77] and [78].

(5) The defence of qualified privilege could not apply to Loh's forwarding of the Complaints to the journalist as it could not be said that Loh was under a legal, social or moral duty to do so and that the journalist had a corresponding interest to receive the communication. A vague, ill-defined sense of moral or social duty to communicate the said information, based on the fact that the conduct of estate agents was being discussed in Parliament at the time, was insufficient: at [80].

(6) The defence of qualified privilege in respect of the Complaints themselves was defeated by actual malice. Loh did not genuinely believe that Ms Prior had committed forgery. Ms Yong had informed him that, in her view, there had been no misrepresentation and it was not fair to say that Ms Prior had forged the Prior Option. Loh had then agreed with Ms Yong that the evidence for his allegations was not watertight. Despite this, he persisted and escalated matters by forwarding the Complaints to the journalist. It was also untrue that he had filed the Complaints at the direction of the authorities or in compliance with any statutory duty. In any event, Loh's threats showed that even if he had a genuine belief that Ms Prior had committed forgery, his dominant motivation was to injure: at [82] to [88].

(7) The defence of justification was not made out. The allegations made in the Complaints carried at least the Chase [Chase v News Group Newspapers Ltd[2003] EMLR 11] Level 2 meaning that there were reasonable grounds to believe that Ms Prior had forged the Prior Option. There were no reasonable grounds for that belief as the Prior Option did not bear any signature and was circulated as a document for acceptance. There were also no reasonable grounds to believe that Ms Prior had...